Question

Using economic terminology, in a brief paragraph, explain HOW the COVID-19 virus has shocked the US economy. Draw the impacts on an AD/AS graph. (Hint: start with the AD/AS model in equilibrium and then demonstrate your curve shifts.) In another short paragraph, briefly explain the US government's fiscal policy initiatives to get the economy back to equilibrium. Draw the expected impact on a new AD/AS graph. (Hint: start with the AD/AS model in disequilibrium and demonstrate the appropriate curve shift.)

-Draw your own graphs on a piece of paper.

Answer 1

AS, AS the covid-19, AD AD) has caused the Call in en AD and As both. the cost of production has incneased to SOS here, the As also has shitted to the left. This app Level has declined to the a Chelping Gout has announced the expansionary fiscal and monetary policies, These policies are both the consumption kector as well as eth production lector. Thus we are expecting that now again the AD and As will shift to right. élu expansionary policies will shift the AD to right und and AS also shib to left right As, ADI AD s-a, x eiro.